IPhone Upgrade from 3G to 3GS?

Planning on upgrading from an iPhone 3G to the new 3G S? You’d better have deep pockets, as AT&T and Apple may charge you $499 to upgrade. That’s for the 32GB model; if you want to save a few bucks and go for the cheaper 16GB model, it will cost $399. These figures come from Apple’s own site, where you can now pre-order an iPhone 3G S ready for delivery on the 19th of June. Although Apple mentioned a $199 and $299 price for the new iPhone, the cost for upgraders is significantly higher; when we applied for an upgrade from a iPhone 3G purchased in 2008, the system quoted us a price of $399 for the 16GB version or $499 for the 32GB, plus an $18 upgrade fee.

The more expensive upgrade is because the account I tried this with had the 2-year term of the contract renewed when I upgraded to an iPhone 3G in 2008; AT&T does not offer reduced upgrade pricing until the initial 2 years are up. The only people who qualify for the advertised $199/$299 pricing are new customers, or those who have not upgraded their phone for more than 2 years.So, those who upgraded when the iPhone 3G was released last year will either have to wait until 2010, or pay through the nose to be on the cutting edge.

UPDATE: it seems that there may be some leniancy in the 2-year rule: when applied for the upgrade with a 1st Generation iPhone where the contract had a couple of months still to run, Apple offered the $199/$299 price. So, it looks like 1st Gen iPhones may get a break, but 3G users will have to pay the full cost.